An ELPE (Hellenic Petroleum) team of officials plans to seek low-priced crude in the Egyptian market, without any trader markups. The ELPE delegation is scheduled to travel to Egypt today to secure better deals, without the intervention of middlemen, for 1.5 million barrels ordered by the Greek refinery from Egyptian suppliers each month.
The markup costs ELPE officials hope to avoid, currently at 0.50 dollars per barrel, are not negligible.
The trip to Egypt by ELPE officials comes as part of the company’s effort to reduce its operating costs amid an international market of fallen crude prices. After having already reduced the company’s trade-related operating costs by 28 percent, ELPE officials believe further cost-cutting capacity exists.
Besides their effort for better deals in Egypt, ELPE officials are also preparing to resume trade with Iran, the world’s fourth largest oil producer, as the country prepares to re-enter the international trading market in anticipation of the end of western-imposed oil and financial sanctions early next year. To do so, Tehran will need to maintain the west’s conditions demanded for its nuclear program. UN inspectors are expected to give the green light for an end to the western-imposed sanctions next month.
ELPE officials have already travelled to Iran for negotiations with the state-run oil company NIOC. ELPE managing director Grigoris Stergioulis has noted an agreement securing a quantity of as many as four million barrels of Iranian crude per month would be considered a good deal by the Greek refinery.
NIOC and ELPE are also engaged in talks to establish a payback program for debt in excess of 500 million euros owed by the Greek company to the Iranian producer. The amount stretches back to 2012, when the sanctions were imposed on Iran. The international banking system refused to complete a payment by ELPE for a crude order received from NIOC just ahead of the sanctions.
ELPE is scheduled to report its financial results for the nine-month period this week.